Sandler O'Neill & Partners LP analyst cuthis investment opinion of Alexander's Inc. to "hold" from"buy."
Theanalyst wrote in a research report: "After years of successive topline growth as ALX brought ondevelopments and leased up space, GAAP revenues will flatten until the nextround of leasing in 2020 at Rego Park. Cash earnings will slowly rise asstraight-line rent burns off and dividend growth is still anticipated to remainhealthy – we estimate 7% both in 2017 and 2018. The value creation of ALXremains both in rolling rents to market in 2020 and in developing Rego 3 (weestimate to be worth $30m as of right - 400k sf @ $75/sf), which is likely tobe another mixed use project. Thus, given the pause in both FFO growth anddevelopment until Rego 3 is finalized and that the stock has outperformed YTD(+12.9% versus RMZ +3.9% and SNL U.S. Office REIT Index +6.4%), we downgradeALX to HOLD from BUY."